Message Boards Digest

February 19, 2021

Here are the most recently added topics on the BenefitsLink Message Boards:

Wacko in Winnebago created a topic in Qualified Domestic Relations Orders (QDROs)

GAL as Alternate Payee???

"I've been embroiled in a parentage case (parents were never married) that repeatedly defies logic. The latest twist is that the minor child's guardian ad litem is now seeking a QDRO to collect their fees from one parent's 401(k) Plan. I have no doubts that the judge will grant/enter/issue the requested QDRO once it is drafted. Is there any case law that supports naming a GAL as an Alternate Payee in a QDRO? I cannot find anything in my research."
3 replies   |    53 views   |    Add Reply

MarZDoates created a topic in 401(k) Plans

Compensation Question - Part Year or Whole Year?

"Plan effective date 1/1/2020. Safe Harbor Non-elective component effective 10/1/20. All employees met eligibility requirements as of 1/1/20. (No mid-year entrants.) Plan document says “Compensation shall include only that compensation which is actually paid to the Participant during that part of the Plan Year the Participant is eligible to participate in the Plan.” Does that mean I use full year comp for Safe Harbor Non-Elective contribution? Or only from 10/1? What if plan sponsor wants to allocate a discretionary Non-Elective contribution in addition to the SHNEC? It would be based on comp for the whole year. Is it a problem if I use two different definitions of comp…whole year for p/s and part year for safe harbor? I've got myself confused....since the employees were participants on 1/1, I'm now thinking I should use comp for the whole year for both. Comments are appreciated!!"
2 replies   |    39 views   |    Add Reply

Lou S. created a topic in Form 5500

2019 Non-calendar 1 man 5500 SF or EZ?

"I have one last off calendar 2019 form year to file for a 1 man plan. In the past we filed SF 1 -man but for 2020 year the form no longer exists. Can I still use the 5500-SF one man for a non-calendar year plan beginning in 2019 and ending in 2020? If I can't use the SF, can I electronically file the 2019 Form 5500-EZ or does it need to be filed on paper? That is can only the 2020 Form 5500-EZ now be filed electronically or can the 2019 Form 5500-EZ also be filed electronically."

1 reply   |    29 views   |    Add Reply

pensionadvisor48 created a topic in Retirement Plans in General

Multiple life insurance policies on one individual inside a PS plan

"The profit sharing plan owns 3 life insurance policies on one insured. The PS 58 cost is reported on each contract. If the insured would like to purchase one of the contracts can the insured use the total accumulated PS 58 costs on all three policies to reduce the taxable distribution on the one contract being purchased?"
1 reply   |    29 views   |    Add Reply

Mr401kPaul created a topic in Distributions and Loans, Other than QDROs

Buying Life Insurance from Terminating 401(k) plan

"I have been out of the retirement plan admin business for a few years and want to run this by the group. Owner has recently retired and wants to terminate his 401(k) Plan. The plan owns a life insurance policy (variable life) where the owner/participant is the insured. He happens to be my brother who was a State Farm Agent. Can he buy the life insurance for it's fair market value (I realize that may be different than the cash value, but the policies are very mature). The Prohibited Transaction Exemption is still applicable to this, correct? He can take personal cash and pay it into the plan as a purchase of the policy - right. Then he can take his RMD for 2021 (he is over 10 years over his 70 1/2 year and has been taking RMD's every year as required) and then terminate the plan and roll the assets into an IRA. Upon his death, his much, much younger spouse can rollover his IRA into a Spousal IRA and then wait until 2032 (her 70 1/2 year) to start RMD's. Am I missing anything? Have any rules changed on me?"
3 replies   |    41 views   |    Add Reply

Tax Cowboy created a topic in Employee Stock Ownership Plans (ESOPs)

Old ESOP Plan Documents / No Adoption Agreement

"Group: New client is in initial stages of audit of Esop. In reviewing her businesses 2013 ESOP Plan Document I noticed there was no Adoption Agreement prepared for client at time. Or at least none the client could find. And no restated esop documents. There are corporate resolutions and an SPD. Its my understanding that the former TPA (who I'm told was a volume submitter) at the time assisted in drafting clients esop documents. I thought it would be easy to contact them but I don't believe they're still in business. It seems a little late in the proverbial game to draft an adoption agreement corresponding with the provisions of the plan document. As part of our IDR disclosure to auditor would you give copy of old ESOP Plan Document with explanation that the TPA is no longer around to obtain a copy of any adoption agreement? Thoughts and comments appreciated."
2 replies   |    29 views   |    Add Reply

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